This article is from the Australian Property Journal archive
SHOPPING mall owner Vicinity Centres has offloaded its Broadmeadows Homemaker Centre in Melbourne’s north for $20 million, after selling a 50% interest in a neighbouring asset in June.
The Broadmeadows Homemaker Centre is located on a 3.4-hectare site, around 19km out from the Melbourne CBD, and comprises a gross lettable area of 5,631sqm with a mix of leading national and chain retailers, integrated with separately owned retail assets occupied by major retailers Harvey Norman, Dan Murphy’s and Bunnings Warehouse.
James Douglas from CBRE managed the sale, with the sale price representing a 7.0% yield.
“The sale process for Broadmeadows Homemaker Centre was highly competitive, with investors attracted to the defensive tenant offering and the centre’s landmark metropolitan site, 15km north-west of the Melbourne CBD in one of Australia’s fastest growing municipalities,” said Douglas.
“The acquisition of the 3.4ha Broadmeadows Homemaker Centre site provides the purchaser with a significant freehold site and control of the large on-grade car park, which is able to accommodate 743 vehicles and provides future development opportunities.”
Douglas noted that more institutional buyers are targeting to large format retail (LFR) assets, with forecasts of strong population growth combined with a limited pipeline boosting the future of the sector.
“While private investors have traditionally dominated the purchases and ownership of LFR assets, over the past few years we have seen increased activity from institutional buyers such as REIT’s,” added Douglas.
“This has been highlighted over the past year, when institutional buyers accounted for 49% of Australia’s LFR transactions compared to 29% of the purchasing activity in 2019.”
Vicinity recently sold off a 50% increase in the neighbouring Broadmeadows Central regional shopping centre to Nikos Property Group for $134.5 million.
The mall landlord recently posted its FY23 results, with its FFO increased by 14.5% to $684.8 million, 15.0c per security, largely driven by a 12.1% uplift in net property income (NPI) to $900.2 million, which is now at pre-COVID levels.
